What do Bookkeeping Records consist of?
It is a requirement of law that you keep adequate business records from which the IRS can confirm whether the tax you are paying is the correct figure based on the correct profit you have stated in your business tax return. Good records mean the accounts at the end of the year will be correct and the profits arrived at accurate.
Poor records means your accountant will have to spend more time arriving at your final figures. This converts to higher fees. Many business owners nowadays choose to use a computerised accounting package. That can be a huge advantage because it cuts away the time spent on laborious, repetitive tasks. It also does away with spending long hours working hand completing manual records such as cashbooks etc.
The accounting records you will need to keep will record:
- All your money going in and going out. This is known as the cash book.
- All your sales including when they have been paid for. This is the sales ledger.
- All your purchas...
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